At the moment, the United States has no federal regulatory framework for digital assets. Below is a summary of what each state has done to regulate cryptocurrency and blockchain technology using its own authorities. What can be found from this report is a general lack of uniformity across state-level digital asset regulation. Cryptocurrency is encompassed in existing money transmission statutes. Ala. Code § 8-7A-2 defines monetary value as “A medium of exchange, including virtual or fiat currencies, whether or not redeemable in money,” and money transmission as “Selling or issuing payment instruments, stored value, or receiving money or monetary value for transmission.” Ala. Code § 8-7A-5 states that “A person may not engage in the business of money transmission” unless they are licensed. Arizona’s legislature is currently considering several bills relating to cryptocurrencies. HB 2204 (passed by the House on February 23, 2022) clarifies the state taxation of digital assets. SB 1127 would allow state agencies to accept cryptocurrency as a payment for fines, penalties, rent, rates, taxes, fees, charges, revenue, financial obligations, and special assessments from cryptocurrency issuers. SB 1128 and ​​SCR 1014 exempt virtual currency from property tax. SB 1341 defines Bitcoin as legal tender. SB 1383 (sent to the governor on June 8, 2022) includes cryptocurrency in the definition of liquid assets for divorce matters. SB 1493 would allow state agencies to pay their employees in virtual currency if requested by the employees. SCR 1013 defines digital currency as a medium exchange and asserts the right to own digital currency. Arkansas has no cryptocurrency-specific laws, but cryptocurrency may be encompassed in existing money transmission statutes. AR Code § 23-55-102 defines monetary value as “a medium of exchange, whether or not redeemable in money,” and money transmission as “selling or issuing payment instruments, stored value, or receiving money or monetary value for transmission.” AR Code § 23-55-201 states that “A person may not engage in the business of money transmission…unless the person” is licensed. The Arkansas Securities Department has issued no-action letters to certain digital asset businesses, exempting them from licensing requirements. This includes Mythical, Inc. (June 22, 2020), which issued virtual currency in a video game, and River Financial, Inc. (May 21, 2020), which sold its own Bitcoin inventory. Arkansas’s Uniform Electronic Transactions Act includes blockchain technology and smart contracts under AR Code § 25-32-122. This statute recognizes signatures, records, and contracts made through blockchain technology as legally valid. California’s Department of Financial Protection and Innovation stated that the Department “has not concluded whether Bitcoin and other cryptocurrencies are a form of money” and thus “has not determined whether exchange services trigger the application of California’s banking or money transmission laws.”[1] As such, digital asset providers are not required to be licensed or supervised, but this determination could change. The Department of Financial Protection and Innovation has provided numerous no-action letters to digital currency businesses. These letters often exempt digital currency ATMs from licensing and have included peer-to-peer transfer businesses. In 2020, a new Consumer Financial Protection Divison was created under the California Department of Financial Protection. Part of this new division’s mandate is to research new financial products including cryptocurrency. On May 4, 2022, Governor Gavin Newsom signed Executive Order N-9-22 to “to Spur Responsible Web3 Innovation, Grow Jobs, and Protect Consumers.” The order itself does not impose any new regulations. Rather, it calls for further research and engagement on the topic of cryptocurrency and blockchain to eventually create a transparent and protective regulatory framework. California’s legislature is currently considering a few relevant bills. AB 2269 (passed by the Assembly on May 12, 2022) would “prohibit a person from engaging in digital financial asset business activity” unless “the person is licensed or registered with the Department of Financial Protection and Innovation.” AB 2689 allows private and public entities to accept virtual currency as a method of payment. SB 1275 could similarly allow state agencies to accept cryptocurrency as payment. Two bills have been passed by Colorado’s legislature and sent to the governor for signing. HB 1053 mandates the Department of Agriculture to create an online program to educate agriculture producers about blockchain technology. SB 25 would allow the treasurer to sell digital security tokens using blockchain technology for state financing. CT Gen. Stat. § 36a-596 defines virtual currency as “any type of digital unit that is used as a medium of exchange or a form of digitally stored value or that is incorporated into payment system technology,” and includes such currency under the definition of money transmission. CT Gen. Stat. § 36a-597 states that “No person shall engage in the business of money transmission in this state…without a main office license issued by the commissioner.” CT Gen. Stat. § 36a-598 requires money transmission businesses seeking a license to declare whether their activities “will include the transmission of monetary value in the form of virtual currency.” CT Gen. Stat. § 36a-600 acknowledges that businesses engaged in the transmission of virtual currency may be denied a license at “the commissioner’s discretion” or face “additional requirements, restrictions or conditions.” CT Gen. Stat. § 36a-602 adds additional surety bond requirements for virtual currency transmitters to account for price volatility. CT Gen. Stat. § 36a-603 requires that non-depository financial institutions “​​hold virtual currency of the same type and amount owed or obligated to such other person.” Connecticut’s Department of Banking has written multiple opinions solidifying cryptocurrency exchanges as license-requiring money transmitters,[2] but has generally excluded digital currency ATMs from this designation.[3] Connecticut’s governor recently signed two laws relating to cryptocurrencies. HB 5506 (May 7, 2022) and SB 3 (May 10, 2022) require the Board of Regents for Higher Education to develop seminar programs to educate small businesses about electronic commerce and virtual currency. Delaware has no cryptocurrency-specific laws, but cryptocurrency may be encompassed in existing money transmission statutes. 5 DE Code § 2303 states that “No person…shall…engage in the business of receiving money for transmission or transmitting the same without having first obtained a license hereunder.” However, money transmission is not defined in Delaware law. Major cryptocurrency exchanges Coinbase, Binance, and Gemini have all registered as money transmitters in Delaware. Delaware allows corporations to maintain their records on a blockchain or blockchain-like technology. 8 DE Code § 224 states that “Any records administered by or on behalf of the corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device, method, or 1 or more electronic networks or databases (including 1 or more distributed electronic networks or databases).”  8 DE Code § 219 and 8 DE Code § 232 provide rules for the transmission of shareholder notifications when corporate records are stored on an electronic network or a blockchain. SB 194, signed in 2018, amends Delaware’s code to allow blockchain technology to be used by statutory trusts. 12 DE Code § 3801 states that beneficial interest in a statutory trust may be evidenced electronically by “1 or more electronic networks or databases (including 1 or more distributed electronic networks or databases).” 12 DE Code § 3806 states that beneficial owners and trustees may “may vote…by means of electronic transmission” including by use of distributed electronic networks or databases. 12 DE Code § 3819 states that “A statutory trust may maintain its records …by means of…1 or more electronic networks or databases (including 1 or more distributed electronic networks or databases), if such form is capable of conversion into paper form within a reasonable time.” SB 183, which was also signed in 2018, makes similar provisions for LLCs and limited partnerships. SB 89, SB 90, and SB 91 were enacted in 2019, and collectively amend the Delaware Revised Uniform Partnership Act and Delaware Limited Liability Company Act, among other statutes, to allow the use of blockchain technology to maintain certain records and facilitate certain electronic transmissions. D.C. has no cryptocurrency-specific statutes, but case law from United States v. Harmon (2021) establishes that cryptocurrency businesses fall under the Money Transmission Act and must register as money transmitters. FL Stat § 896.101 includes virtual currency in its definition of monetary instruments. FL Stat § 560.103 defines a money transmitter as an entity that “receives currency, monetary value, or payment instruments for the purpose of transmitting the same by any means.” FL Stat § 560.125 states that “A person may not engage in the business of a money services business or deferred presentment provider in this state unless the person is licensed.” State v. Espinoza (2019) found that this licensing requirement includes those conducting cryptocurrency transactions, even two-party, individual, ones. The deadline to comply with the Espinoza ruling was the last day of 2021. On May 12, 2022, Governor Ron DeSantis signed HB 273 into law, which revises many of Florida’s existing cryptocurrency statutes. The law defines virtual currency under FL Stat § 560.103 and explicitly includes virtual currency transmitters in the scope of FL Stat § 560. It clarifies FL Stat § 560.125 and partially undoes the Espinoza ruling, stating that money transmitter licenses are only required for “intermediaries” that “transmit…virtual currency from one person to another location or person,” and who have “the ability to unilaterally execute or indefinitely prevent a transaction.” Therefore, two-party, individual transactions will no longer require licensing, but major exchanges still will. HB 273 eases restrictions on these exchanges by excluding virtual currency from the definition of payment instrument and regulating exchanges solely under money service business regulations. It also allows exchanges to only hold virtual currency of the same type and amount owed instead of requiring additional cash reserves. The law takes effect on January 1, 2023, and will solidify Florida as a crypto-friendly state. FL Stat § 559.952 establishes a Financial Technology Sandbox “to allow financial technology innovators to test new products and services in a supervised, flexible regulatory sandbox using exceptions to specified general law and waivers of the corresponding rule requirements under defined conditions.” Under this law, developing blockchain or cryptocurrency businesses with sandbox permission are exempt from needing a money transmitter license during the license period and face less regulatory scrutiny. GA Code § 7-1-680 defines money transmission as “engaging in the business of receiving money or monetary value for transmission” and virtual currency as “a digital representation of monetary value that does not have legal tender status.” GA Code § 7-1-681 states that “No person…shall engage in…money transmission without having first obtained a license authorizing such activity.” Based on the prior definitions, cryptocurrency transactions fall under this licensing requirement. The Department of Banking and Finance has issued Cease and Desist Orders against unlicensed cryptocurrency platforms, such as with CampBX in 2018. GA Code § 7-1-690 further allows the Department of Banking and Finance “to enact rules and regulations that apply solely to persons engaged in money transmission or the sale of payment instruments involving virtual currency.” GA Code § 53-13-2 defines a digital asset under the Revised Uniform Fiduciary Access to Digital Assets Act as “an electronic record in which an individual has a right or interest. Such term shall not include an underlying asset or liability unless the asset or liability is itself an electronic record.” The Act lays out rules for who can access a person’s digital assets, among other things. Since June 30, 2020, businesses must get permission from Hawaii’s Digital Currency Innovation Lab to engage in cryptocurrency transactions under a “two-year program to evaluate whether the digital currency industry should be licensed or not.” After this date, legislation is needed “to enable reasonable licensing of this industry or exempt it from licensing.” The pilot project was recently extended another two years to end on June 30, 2022 (HR 115). This came after numerous other bills that attempted to set up a licensing process failed to pass.[4] The legislature recently passed SB 2695 (sent to the governor on May 6, 2022), which would establish a task force for blockchain and cryptocurrency. The Idaho Department of Finance explicitly states that “Virtual Currency Exchangers” are “required to have an Idaho Money Transmitter license.” That being said, the Department has issued numerous no-action letters for businesses selling their own inventory of digital currency, often through digital currency ATMs, which exempts these businesses from licensing requirements. The Department has also exempted businesses where “all exchange margin trading and/or lending is strictly limited to digital assets” and that do “not permit trading in, or allow deposits of, fiat currency.” “The Digital Assets Act was signed into law by Idaho’s governor on March 28. This law categorizes digital assets as intangible personal property and applies existing property laws to such assets. 05 ILCS 657, Illinois’ Transmitters of Money Act, is unclear about how digital currencies should be treated. Illinois’ Department of Financial and Professional Regulation released guidance in 2017 stating that: “A person or entity engaged in the transmission of solely digital currencies…would not be required to obtain a [Transmitters of Money Act] license. However, should transmission of digital currencies involve money in a transaction, that transaction may be considered money transmission depending on how the transaction is organized. Any person or entity engaging in a transaction involving both digital currencies and money should request a determination from the Department on whether or not such activity will require a [Transmitters of Money Act] license.” Consequently, the Division of Financial Institutions has issued numerous non-binding statements to advise cryptocurrency businesses whether they must be licensed. In 2019 Illinois enacted SB 1464, which incorporates cryptocurrency into the Illinois Funeral or Burial Funds Act. IN Code § 28-8-4-13 does not mention digital currency in the definition of money transmission. The Indiana Department of Financial Institutions states that “a money transmitter license is not required” for “A fiat or virtual currency exchange, as long as the consumer is strictly buying or selling the currency and the consumer does not have the ability to send fiat currency to another consumer.” Indiana’s governor recently signed into law SB 351, which amends Indiana’s UCC by adding a new chapter governing the possession of controllable electronic records. Indiana adopted SB 188 in 2021, which incorporates cryptocurrency into the Revised Uniform Unclaimed Property Act. IA Code § 533C.103 does not list digital currency businesses as an exception from Iowa’s Uniform Money Services Act. Therefore, businesses dealing with cryptocurrency are likely governed by IA Code § 533C.201, which states that “A person shall not engage in the business of money transmission…unless the person” is licensed. Major cryptocurrency exchanges Coinbase, Binance, and Gemini have all registered as money transmitters in Iowa. HF 2445 was signed into law by Iowa’s governor on June 13, 2022, which amends Iowa’s UCC by adding a new chapter governing the possession of controllable electronic records. On April 18, 2019, HB 2039 was signed into law, which allows “distributed electronic networks or databases” to be used to keep various business records. KY Rev Stat § 286.11-003 broadly defines money transmission as “engaging in the business of receiving money or monetary value to transmit, deliver, or instruct to be transmitted or delivered, money or monetary value,” which could include digital currency. If so, cryptocurrency businesses would be governed by KY Rev Stat § 286.11-005, which states that “no person shall engage in the business of money transmission in this state without a license.” Major cryptocurrency exchanges Coinbase, Binance, and Gemini have all registered as money transmitters in Kentucky. KY Rev Stat § 393A.010 includes virtual currency under Kentucky’s Unclaimed Property Act. On March 25, both SB 255 and HB 230 were enacted. The two bills lay out provisions for commercial mining of cryptocurrency and its taxation, including a tax break for certain mining operations. LA Rev Stat § 6:1381, known as the Virtual Currency Business Act, lays out a series of regulations for virtual currency businesses. Most notably, LA Rev Stat § 6:1384 states that “A person shall not engage in virtual currency business activity…unless the person is one of the following: (1) Licensed in this state…(2) Registered with the department and operating pursuant to R.S. 6:1390. (3) Exempt from licensure or registration.” LA Rev Stat § 6:1383 provides exemptions for businesses governed by “(1) The Electronic Fund Transfer Act of 1978. (2) The Securities Exchange Act of 1934. (3) The Commodities Exchange Act of 1936. (4) The Louisiana Securities Law.” This section also exempts regulated financial institutions, foreign exchange businesses, attorneys to the extent of providing escrow services, those using cryptocurrencies for personal or academic purposes, and many others. LA Rev Stat § 6:1389 further exempts “A person whose volume of virtual currency business activity in United States dollar equivalent of virtual currency will not exceed thirty-five thousand dollars annually” under certain other conditions. The Office of Financial Institutions has the right to “take an enforcement measure against a licensee, registrant, or person that is neither a licensee nor registrant but is engaging in virtual currency business activity” under LA Rev Stat § 6:1393. 32 ME Rev Stat § 6102 defines money transmission as “the business of selling or issuing payment instruments or the business of receiving money, including virtual currencies, for transmission or transmitting money, including virtual currencies, within the United States or to locations abroad by any means.” 32 ME Rev Stat § 6103 states that “a person…​​may not engage in the business of money transmission without.” As virtual currency is explicitly defined under money transmission, such transactions require a license. Under 209 CMR 45.00 MA Code of Regs 45.02, Massachusetts only regulates money transmission to foreign countries. The Massachusetts Department of Banking issued Opinion 19-008 in 2020 which found that a company that processed fiat to virtual currency exchanges and allowed for cross-border virtual currency transactions did not consist of license-requiring international money transmission. Opinion 020-003, also in 2020, found that a company providing a digital wallet service and peer-to-peer transactions did not require a license either. MI Comp L § 487.1003 defines money transmission services as “selling or issuing payment instruments or stored value devices or receiving money or monetary value for transmission.” MI Comp L § 487.1011 states that “a person shall not provide money transmission services… without a license.” According to Michigan’s Department of Insurance and Financial Services, money transmission services include “holding funds in an e-wallet” and such services providers “would need to obtain the appropriate license.” In 2015, the Michigan Department of Treasury published guidance on how state sales tax applies to virtual currency. In December 2019, Michigan enacted HB 4107, HB 4103, HB 4105, and HB 4106, which amended the Michigan penal code to include definitions for cryptocurrency and distributed ledger technology. Minnesota has no cryptocurrency-specific laws, but cryptocurrency may be encompassed in existing money transmission statutes. MN Stat § 53B.03 defines money transmission as “selling or issuing payment instruments or engaging in the business of receiving money for transmission or transmitting money.” MN Stat § 53B.02 states that “no person…shall engage in the business of money transmission without a license.” Major cryptocurrency exchanges Coinbase, Binance, and Gemini have all registered as money transmitters in Minnesota. Mississippi has no cryptocurrency-specific laws, but cryptocurrency may be encompassed in existing money transmission statutes. MS Code § 75-15-3 defines monetary value as “a medium of exchange, whether or not redeemable in money” and money transmission as “to engage in the business of the sale or issuance of checks or of receiving money or monetary value for transmission to a location within or outside the United States by any and all means.” MS Code § 75-15-5 states that “No person…shall engage in the business of money transmission…without having first obtained a license.” Major cryptocurrency exchanges Coinbase, Binance, and Gemini have all registered as money transmitters in Mississippi. Missouri’s legislature recently passed HB 1472, which was sent to the governor on May 18, 2022. This bill would modify the offense of money laundering to more broadly encompass financial transactions and adds a definition for cryptocurrency. Montana’s Department of Banking and Financial Regulations explicitly states that “There is currently no legislation from the Montana Division of Banking regulating Money Service Businesses (MSBs). MSBs do not have to be licensed with the Division.” MT Admin Rules 44.11.408 states that “A candidate or political committee may accept electronic contributions from online payment service providers and payment gateways…such as Bitcoin or other electronic peer-to-peer systems” and “All electronic contributions shall be reported.” In 2019, Montana’s governor signed HB 584, which exempts cryptocurrency transactions from certain securities laws and defines utility token. The Nebraska Financial Innovation Act (NE Code § 8-3001 to 3031) lays out a series of guidelines for how digital asset depositories are chartered, operated, supervised, and regulated in Nebraska. The express intent of the Act is to “provide a necessary and valuable service to blockchain innovators and customers, emphasize Nebraska’s partnership with the technology and financial industry, safely grow this state’s ever-evolving financial sector, and afford more opportunities for Nebraska residents.” NE Code § 8-3003 defines a digital asset depository as “a financial institution that securely holds liquid assets…in the form of controllable electronic records.” The same section defines blockchain, controllable electronic record, decentralized finance, fork, and stablecoin. NE Code § 8-3015 states that “No corporation shall act as a digital asset depository without first obtaining authority or a charter to operate” from the Director of Banking and Finance. Existing financial institutions need authorization to open a digital asset depository department while strictly digital asset depository institutions need a new charter.  NE Code § 8-3005 permits digital asset depositories to “Carry on a nonlending digital asset banking business” and “Provide payment services.” The same section states that digital asset depositories “shall not accept demand deposits of United States currency” or “make any consumer loans.” NE Code § 8-3024 allows digital asset depositories to “Provide digital asset and cryptocurrency custody services…Issue stablecoins and…Use independent node verification networks and stablecoins for payment activities.” LB 707, signed into law on April 18, amends this section to restrict digital asset and cryptocurrency custody services to cryptocurrency that was either “Initially offered for public trade more than six months prior to the date of the custody services” or “Created or issued by any bank, savings bank, savings and loan association, or building and loan association” authorized to do business in Nebraska. NE Code § 8-3008 requires digital asset depositories to give customers “full and complete” disclosure of account terms and conditions with “no material misrepresentations” and “in readily understandable language.” NE Code § 8-3009 requires that digital asset depositories “maintain unencumbered liquid assets denominated in United States dollars valued at not less than one hundred percent of the digital assets in custody.” The Act overall allows Nebraska banks to offer cryptocurrency services that are not available in the vast majority of other states. Nebraska has other laws relating to cryptocurrency beyond the Financial Innovation Act. NE Code § 8-2715 defines monetary value as “a medium of exchange, whether or not redeemable in money,” which encompasses cryptocurrency. NE Code § 8-2716 defines money transmission as “the business of the sale or issuance of payment instruments or stored value or of receiving money or monetary value for transmission to a location.” NE Code § 8-2725 states that “a person shall not engage in money transmission without a license.” NE Code § 8-2724 states that “The requirement for a [money transmission] license…does not apply to…[chartered] digital asset depository institutions.” 316 NE Admin Rules and Regs ch 316-54-102 includes cryptocurrency under “unacceptable forms of payment” for “Mechanical Amusement Devices” (such as slot machines). The Nevada Financial Institutions Division states that “​​Any entity that facilitates the transmission of or holds fiat or digital currency…should contact the NFID to request a licensure determination.” Whether a license is required is decided on a case-by-case basis. However, the Division advises that “an entity engaged in the business of selling or issuing checks or of receiving for transmission or transmitting money or credits is required to have a license under [NV Rev Stat § 671]. However, if an entity proposes to serve as a digital custodian for any form of digital currency, then the business may be regulated as a trust company under [NV Rev Stat § 669].” NV Rev Stat § 657a creates a Regulatory Experimentation Program (sandbox) for Product Innovation. Under this program, companies that use “a new or emerging technology, or any novel use of an existing technology, to address a problem, provide a benefit or otherwise offer or provide a financial product or service that is determined by the Director not to be widely available in this State” (NV Rev Stat § 657A.150) can if accepted, “obtain limited access to markets” without “Applying for or obtaining any license or other authorization otherwise required” (NV Rev Stat § 657A.200). The statute lays out a series of specific requirements for disclosure, operation, and oversight during the two-year testing period. In 2019, Nevada adopted three bills that include virtual currency in existing laws. SB 164 “clarif[ies] that certain virtual currencies are intangible personal property for the purposes of taxation.” AB 15 includes virtual currency in the definition of a monetary instrument for the purpose of crimes related to certain financial transactions. SB 44 includes virtual currency in the definition of property under the Revised Uniform Unclaimed Property Act. NJ Rev Stat § 17:15C-2 broadly defines a payment instrument as an “instrument or written order for the transmission or payment of money,” which could include cryptocurrency. The same statute defines a money transmitter as “a person who engages…in the business of: (1) the sale or issuance of payment instruments for a fee, commission or other benefit; (2) the receipt of money for transmission or transmitting money…; or (3) the receipt of money for obligors for the purpose of paying obligors’ bills, invoices or accounts for a fee, commission or other benefit paid by the obligor.” NJ Rev Stat § 17:15C-4 states that “No person…shall engage in the business of money transmission without a license.” NJ Rev Stat § 3B:14-61.1, New Jersey’s Uniform Fiduciary Access to Digital Assets Act, allows estates to manage digital assets under certain circumstances. NC Gen Stat § 53-208.42 states that the definition of money transmission “​​includes maintaining control of virtual currency on behalf of others.” NC Gen Stat § 53-208.43 adds that “No person …shall engage in the business of money transmission…without a license.” NC Gen Stat § 53-208.44 exempts “A person appointed by a payee to collect and process payments as the bona fide agent of the payee” for “transactions conducted in whole or in part in virtual currency” from this licensing requirement. Miners and blockchain software companies are exempt from such requirements.  NC Gen Stat § 53-208.47 states that businesses involved with “virtual currency transmission” may be required to “obtain additional [​​surety bond] insurance coverage to address related cybersecurity risks inherent in the applicant’s business model.” NC Gen Stat § 53-208.48 gives the Commissioner of Banks the right to “request that [a] licensee verify…aggregate virtual currency transmission obligations outstanding and virtual currency held as permissible investments, including virtual currency stored offline” if a business has cryptocurrency investments. The North Carolina Commissioner of Banks’ Money Transmitter Frequently Asked Questions addresses more specific requirements. North Carolina’s legislature is currently considering HB 631/SB 688, which includes “Digital, crypto, and virtual currencies” under the definition of “Cash equivalent” for sports betting. In 2019, North Dakota adopted three blockchain-related bills. HCR 3004 “request[s] the Legislative Management to study the potential benefit value of blockchain technology implementation and utilization in state government administration and affairs.” HB 1048 mandates that the Department of Financial Institutions “research and develop the use of distributed ledger-enabled platform technologies, such as blockchains, for computer-controlled programs, data transfer and storage, and program regulation to protect against falsification, improve internal data security, and identify external hacking threats…The department shall select a state agency…to serve as a pilot program for the implementation and use of distributed ledger-enabled platform technologies.” HB 1045 recognizes signatures, records, and contracts secured through blockchain technology as legally valid. Ohio Rev Code § 1306.01 states that a record, contract, or signature “that is secured through blockchain technology is considered to be” legally valid. ​​6 OK Stat § 6-1512 defines a money transmitter as “any person who engages in the business of accepting currency or funds denominated in currency, and transmits the currency or funds or the value of the currency or funds, by any means” including through “an electronic funds transfer network.” If this definition were interpreted to include cryptocurrency transactions, cryptocurrency businesses would be required to hold a license under 6 OK Stat § 6-1513. In 2019, Oklahoma adopted SB 700, which states that records, contracts, and signatures “secured through blockchain technology” are considered legally valid. The Pennsylvania Department of Banking and Securities issued Money Transmitter Act Guidance for Virtual Currency Businesses to clarify which businesses need licenses or other supervision. The guidance states that “Virtual Currency Trading Platforms…are not money transmitters,” and that “Virtual Currency Kiosks, ATMs, and Vending Machines…would not be money transmitters under the MTA.” Therefore, neither type of cryptocurrency business is subject to the Money Transmitter Act or its licensing requirements. Pennsylvania’s legislature is currently considering several relevant bills. HB 1724 “Establish[es] a task force on digital currency and the impact on widespread use of cryptocurrency and other forms of digital currencies in this Commonwealth.” HB 2512 includes virtual currency in the definition of a cash transaction for real property transactions. SB 399 and SB 401 relate to ethics standards and financial disclosure requirements for public officers and include virtual currency in the definition of a cash gift. SB 1053 requires that “The [Transportation Commission]…establish and maintain a system for the payment of tolls or charges by an operator of a vehicle using alternative electronic payment options” including “digital wallets, peer-to-peer money transfer systems and cryptocurrencies.” SB 1262 “Amends Title 27 (Environmental Resources) of the Pennsylvania Consolidated Statutes, providing for emerging technologies” and defines cryptocurrency. RI Gen L § 19-14-1 includes “maintaining control of virtual currency or transactions in virtual currency on behalf of others” under the definition of currency transmission. RI Gen L § 19-14-2 states that “No person shall engage within this state in the business of…Providing currency transmission for a fee or other consideration…without first obtaining a license or registration.” RI Gen L § 19-14.3-1 lays out a series of exemptions from this requirement. RI Gen L § 19-14.3-3.5 is a list of disclosures virtual currency businesses must make to their customers. RI Gen L § 19-14.3-3.6 states that “​​A licensee that has control of virtual currency for one or more persons shall maintain in its control an amount of each type of virtual currency sufficient to satisfy the aggregate entitlements of the persons to the type of virtual currency.” Rhode Island’s Department of Business Regulation has posted further guidance in the Rhode Island Currency Transmission Law: Frequently Asked Questions. The South Carolina Attorney General’s Money Services Division stated in a 2018 interpretive letter that “​​virtual currencies lack the characteristics of mediums of exchange. Therefore, it is the view of the Division that virtual currencies alone do not qualify as monetary value. However, to the extent that virtual currency transactions also involve the transfer of fiat currency, they may be subject to money transmission regulations under the [South Carolina Anti-Money Laundering] Act.” The same letter stated that “​​activities as they relate to virtual currencies do not require a license under the Act.” The Attorney General stated in Administrative Order Number MSD-19003 that “When an ATM does not act as a third party, and only facilitates a sale or purchase of virtual currency by the ATM operator directly with the customer…no license is required under the Act.” However, “​​The exchange of virtual currency for fiat currency through an ATM that acts as a third party exchanger that facilitates contemporaneous exchanges of virtual currency for fiat currency…is money transmission and requires a license under the Act.” The South Carolina Attorney General’s Money Services Division has posted further guidance on their Money Services FAQs page. SD Codified L § 53-12-1 defines blockchain technology. It also “includes a record that is secured through blockchain technology” under the definition of electronic record, and “includes a signature that is secured through blockchain technology” under the definition of electronic signature. The Tennessee Department of Financial Institutions issued a memo in 2015 entitled Regulatory Treatment of Virtual Currencies under the Tennessee Money Transmitter Act. It stated that “cryptocurrency is not money under the Tennessee Money Transmitter Act” and “receiving it in exchange for a promise to make it available at a later time or different location is not money transmission…However, when a cryptocurrency transaction does include sovereign currency, it may be money transmission depending on how the sovereign currency is handled.” The guidance went on to say “The exchange of cryptocurrency for sovereign currency between two parties is not money transmission…Exchange of one cryptocurrency for another cryptocurrency is not money transmission…Transfer of cryptocurrency by itself is not money transmission…Exchange of cryptocurrency for sovereign currency through a third party exchanger is generally money transmission…Exchange of cryptocurrency for sovereign currency through an automated machine is usually but not always money transmission.” Cryptocurrency businesses whose activity is deemed money transmission would be required to hold a license under TN Code § 45-7-102. TN Code § 66-29-102 includes virtual currency as property under Tennessee’s Uniform Unclaimed Property Act. SB 535 was signed into law on April 14, 2022, and states that “a governmental entity shall not pay, compensate, award, or remit funds in the form of, or facilitate directly or indirectly the conversion of compensation or funds to, blockchain, cryptocurrency, non-fungible tokens, or virtual currency to an individual person, corporation, or other entity without the prior written approval of the state treasurer.” Local governments are also forbidden from “procur[ing] services for the performance of the” above-stated actions. In 2018, Tennessee enacted SB 1662, which states that “Smart contracts may exist in commerce. No contract relating to a transaction shall be denied legal effect, validity, or enforceability solely because that contract is executed through a smart contract.” It further states that records, contracts, and signatures secured through distributed ledger technology are legally valid. It also confirms that “a person that…uses distributed ledger technology to secure information that the person owns or has the right to use retains the same rights of ownership or use with respect to that information as before the person secured the information using distributed ledger technology.” On April 20, 2022, Governor Bill Lee signed HB 2645, which lays out provisions for governing Decentralized Autonomous Organizations (DAOs). The Texas Department of Banking issued Supervisory Memorandum 1037 in 2019. It stated that “Exchanging virtual currency for sovereign currency is not currency exchange under the Texas Finance Code” and “no currency exchange license is required in Texas to conduct any type of transaction exchanging virtual with sovereign currencies.” The memo further states that “cryptocurrency is not money under the Money Services Act” and “receiving it in exchange for a promise to make it available at a later time or different location is not money transmission.” More specifically, the memo advises that “Exchange of cryptocurrency for sovereign currency between two parties is not money transmission…Exchange of one cryptocurrency for another cryptocurrency is not money transmission…Transfer of cryptocurrency by itself is not money transmission…Exchange of cryptocurrency for sovereign currency through a third-party exchanger is generally money transmission…Exchange of cryptocurrency for sovereign currency through an automated machine is usually but not always money transmission.” The memo distinguishes stablecoins as possibly being “considered money or monetary value under the Money Services Act” and thus “receiving it in exchange for a promise to make it available at a later time or different location may be money transmission.” Cryptocurrency businesses that are deemed money transmitters must be licensed under ​​TX Fin Code § 151.302. In 2019, Texas enacted SB 207, which includes digital currency under the definition of funds for money laundering offenses. HB 335, adopted on March 24, 2022, “creates the Blockchain and Digital Innovation Task Force” to ​​“develop knowledge and expertise about blockchain and related technologies” and “make policy recommendations related to blockchain and related technologies.” In 2019, Utah enacted the Blockchain Technology Act, which “defines and clarifies terms related to blockchain technology” and “exempts a person who facilitates the creation, exchange, or sale of certain blockchain technology-related products from [Utah’s Money 15 Transmitter Act].” That same year, Utah’s legislature adopted HJR 19, a “Joint Resolution Directing a Study of Blockchain Technology.” Utah’s regulatory sandbox was also created in 2019 under HB 378, “which allows a participant to temporarily test innovative financial products or services on a limited basis without otherwise being licensed or authorized to act under the laws of the state” and explicitly includes blockchain technology under the definition of innovation. 8 V.S.A. § 2500 includes virtual currency in Vermont’s money transmission statute. 8 V.S.A. § 2502 requires money transmitters, including cryptocurrency businesses, to obtain a license. 8 V.S.A. § 2541 states that “virtual currency owned by the licensee” is a permissible investment for money transmitters, “but only to the extent of outstanding transmission obligations received by the licensee in identical denomination of virtual currency.” On May 27, 2022, Governor Phil Scott signed HB 515, which states that kiosks “where a consumer may access money transmission services, including buying or selling virtual currency” must be registered and licensed, and are subject to certain disclosure requirements. In 2019, HB 550 included virtual currency in the definition of property under Vermont’s Revised Uniform Unclaimed Property Act. WA Rev Code § 19.230.010 defines money transmission as “receiving money or its equivalent value (equivalent value includes virtual currency) to transmit, deliver, or instruct to be delivered to another location.” WA Admin Code 208-690-015 states that “Storage of virtual currency by a person when the virtual currency is owned by others and the person storing the virtual currency does not have the unilateral ability to transmit the value being stored” is “excluded from the [Uniform Money Services] Act.” Therefore, only businesses that transmit cryptocurrency are required to be licensed under WA Rev Code § 19.230.030. WA Rev Code § 19.230.040 states that, “For business models that store virtual currency on behalf of others, the applicant must provide a third-party security audit of all electronic information and data systems acceptable to the director.” WA Admin Code 208-690-030 has a similar provision. WA Rev Code § 19.230.200 states that “A licensee transmitting virtual currencies must hold like-kind virtual currencies of the same volume as that held by the licensee but which is obligated to consumers.” WA Admin Code 208-690-085 has a similar provision. WA Rev Code § 19.230.370 and WA Admin Code 208-690-205 layout disclosure requirements specific to virtual currency businesses. WA Admin Code 208-690-060 states that “The minimum tangible net worth if the company provides virtual currency storage is one hundred thousand dollars,” which is different from the net worth requirement for other money transmitters. Washington’s Department of Financial Institutions has further guidance on their page entitled FinTech Licensing and Regulation Guidance. On March 30, 2022, Governor Jay Inslee sign into law SB 5531, which includes virtual currency in the definition of property under the ​​Uniform Unclaimed Property Act. The Washington Department of Revenue stated in 2019 that “Taxpayers must convert bitcoin [and other cryptocurrency] to US dollars, prior to remitting payment to the Department of Revenue.” The Department also gave tax guidance for accepting virtual currency in a sales transaction. In the same 2019 guidance statement, the Department announced a tax on Bitcoin mining “determined by the value of the bitcoin at the time it is obtained by the miner.” In 2020, the State of Washington Securities Division stated in a consent order that “The offer and/or sale of [ERC-20 tokens named RHOCs]…constitute the offer and/or sale of a security as defined in [WA Rev Code § 21.20.005].” This means that the unregistered offering violated WA Rev Code § 21.20.040. WV Code § 32A-2-1 broadly defines both currency transmission and money transmission as “engaging in the business of…receiving currency, the payment of money, or other value that substitutes for money by any means for the purpose of transmitting,” which seems to include cryptocurrency. WV Code § 32A-2-2 states that “a person may not engage in the business of currency exchange, transportation or transmission in this state without a license.” WV Code § 31A-8G-1 creates the West Virginia Fintech Regulatory Sandbox Program. According to WV Code § 31A-8G-4, a licensee of this Sandbox “is not subject to state laws that regulate financial products or services.” WV Code § 61-15-1 explicitly includes cryptocurrency under the definition of monetary instruments which are banned from being used to launder value. On March 26, 2022, Governor Jim Justice signed HB 4511, which amends the ​​Unclaimed Property Act to include provisions for the treatment of virtual currency. WY Stat § 40-22-104 states that “Buying, selling, issuing, or taking custody of payment instruments in the form of virtual currency or receiving virtual currency for transmission” is exempt from the Wyoming Money Transmitters Act and its licensing requirements. WY Stat § 40-29 establishes the Financial Technology Sandbox, which cryptocurrency businesses may join. WY Stat § 40-29-103 states that Sandbox participants “may be granted a waiver of specified requirements imposed by statute or rule.” WY Stat § 40-29-106 and WY Stat § 40-29-104 offer specifics on applying to and operating under the Sandbox. WY Stat § 13-12-101 establishes the Special Purpose Depository Institutions Act. The Wyoming Division of Banking has stated that this act allows special purpose depository institutions (SPDIs) “to receive deposits and conduct other activity incidental to the business of banking, including custody, asset servicing, fiduciary asset management, and related activities.” The Division further states that “SPDIs will likely focus on digital assets, such as virtual currencies, digital securities and digital consumer assets. For example, SPDIs may elect to provide custodial services for digital assets and, in accordance with customer instructions, undertake authorized transactions on behalf of customers. SPDIs may also conduct activity under Wyoming regulations tailored to digital assets, which address issues such as technology controls, transaction handling, and custody operations for digital assets.” WY Stat § 34-29-101 is a statute entirely dedicated to digital assets, which defines key terms, classifies digital assets as property, and gives guidance for custodial services along with other aspects of digital asset businesses. WY Stat § 34-29-106, the Utility Token Act, exempts utility tokens from Wyoming’s securities laws if certain conditions are satisfied. In 2019, HB 62 was enacted to “establi[sh] that open blockchain tokens with specified consumptive characteristics are intangible personal property and not subject to a securities exemption.” The same bill lays out notification requirements and enforcement authorities of the state regulator. That same year, HB 185 was adopted to allow “corporations to issue certificate tokens in lieu of stock certificates as specified.” This collection of laws makes Wyoming arguably the most cryptocurrency-friendly state in the country. Draft for discussion. Not intended as legal advice. Updated as of June 23, 2022.